NLNG strikes first deals for domestic LNG delivery

  • Plans groundbreaking for Train-7

Sopuruchi Onwuka

Africa’s premier and largest gas processing company, the Nigeria Liquefied Natural Gas (NLNG) Limited, has expanded its domestic gas supply channel with three contracts for delivery of liquefied natural gas (LNG) to local offtakers.

The company declared that it executed three Sales and Purchase Agreements (SPAs) for supplies to Asiko Power Limited, Bridport Energy Limited and Gas-Plus Synergy Limited in a move that would broaden virtual gas supply models in domestic market and de-constrain flow of fuels and feedstock to key demand centres in the country.

MD of NLNG, Mr Tony Attah.

The development came ahead of planned groundbreaking ceremony for the seventh liquefaction train of the company as it drives rapid expansion programme that would increase processing capacity from current 22 million tons per annum to about 30 million tons per annum.

Under the commercial arrangements for supply of domestic LNG, the company, which has supplied liquefied petroleum gas (LPG) popularly called cooking gas to the domestic since 2007, is now committed to supplying less volatile LNG for mainly industrial and commercial application.

At a press conference hosted by the company on the sidelines of the ongoing Nigerian International Petroleum Summit (NIPS) holding in Abuja, the Managing Director, Mr Tony Attah, announced the commitment of NLNG to delivering significant 1.1 million tons of liquefied natural gas per annum to three offtakers in the domestic market.

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The SPAs, according to Mr Attah, would facilitate the project execution and development of infrastructure led by off-takers to aid LNG delivery into the domestic market. The commercial terms and tenure of the SPAs as well as the financial value of the gas volumes captured in the deals were not disclosed at the press conference hosted by the parties.

Mr Tony Attah however stated that all parties to the agreements are satisfied with the commercial terms. He added that terms were determined on the basis commercial negotiation, clarifying that there were no components of subsidy in the arrangement.

The Oracle Today reports that the SPAs would now expand the local virtual arrangements for enhanced delivery of LNG to locations that are remote from existing distribution pipeline networks. They also established NLNG as full composite gas supply factor for local and export markets, supplying both LPG and LNG for diverse domestic, commercial and industrial applications.

With the deals, the offtakers which have been playing in the domestic LPG niche would now diversify their portfolios into maximum gas supplies to industries and power plants.

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In listing the economic benefits of the SPAs, Mr Attah stated that the deals would open the way for similar supply arrangements out of its Bonny liquefaction plants, adding that other SPAs were already in the works while the board of the company considers Wave II of the model.

He said deliveries would made currently off the company’s vessels and also through the Bonny-Bodo Road when is it is completed. He said theN120 billion road project facilitated with N60 billion contribution from NLNG is already 50 percent competed.

The new supply channels to the domestic market, Mr Attah pointed out, has totally altered NLNG’s reputation as an exclusive export company, and consolidated its identity as responsible, trusted and reliable global company with mission to build a better Nigeria.

He said the company has the primary purpose of bringing energy to the world, starting from home.

“At the home front, we are distinguished as a development partner with Nigeria’s Government, with our six-train plant generating more than US$110 billion in revenue since it began operation in 1999.

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“Nigeria LNG has paid about US$18 billion as dividends to the Federal Government of Nigeria, through the state-owned Nigerian National Petroleum Corporation (NNPC) 49% shareholding and equivalent amount as dividend to the other three shareholders in the same time period.

“We have also paid about US$15 billion for feed gas purchases to the Federal Government of Nigeria through its shareholding in NNPC and about USD9 billion in taxes,” he pointed out.

Apart from delivering financial revenue to government and people of Nigeria, Mr Attah declared, NLNG has been contributing to deepening domestic demand for LPG and has now dedicated 450,000 tons of LPG to the market in a move to displace dirty domestic fuels with cleaner gas options.

This, according to him, would cut the fatal impact of dirty kitchen fuels on the health and life of thousands of the vulnerable poor people in the country.

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